Question

Jeanie acquires an apartment building in 2008 for $280,000 and sells it for $480,000 in 2019. At the time of sale there is $60,000 of accumulated straight-line depreciation on the apartment building. Assuming Jeanie is in the highest tax bracket for ordinary income and the Medicare tax on net investment income applies, how much of her gain is taxed at 28.8 percent?

Answer 1

$60,000

Step-by-step explanation:

According to section 1250 of the Internal Revenue Service, the depreciation previously allowed as a deduction would now be taxed in the case of ordinary income at the highest tax level.

And, For this, the asset should be depreciated real property.

In the question, there is depreciation charged for apartment building so the same is eligible

The eligibility is allowed up to $60,000 and the same is to be considered